The 2026-27 Hong Kong Budget introduces a 100% waiver of 2025/26 profits tax, capped at $3,000 per case, benefiting ~171,000 businesses. This one-off relief applies to final profits tax for 2025/26 but not provisional tax. Global Minimum Tax (GloBE) rules took effect for MNEs on Jan 1, 2025.
Key 2026-27 Budget Tax Updates
MNE Rules: Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 is in effect, implementing Pillar 2 GloBE rules for fiscal years starting on/after Jan 1, 2025.
Profits Tax Reduction (2025/26): 100% reduction for 2025/26, subject to a $3,000 ceiling per case (compared to $1,500 in 2024/25).
Coverage: Applies to corporations, partnerships, and sole proprietorships.
Scope: The reduction applies to the final tax payable for the year of assessment 2025/26, not provisional tax.
Other Incentives: Non-domestic property rates concession for the first two quarters of 2026/27 ($500 cap per property).